Poxviruses provide a unique experimental system for studying DNA replication. The ends of the linear double-stranded DNA genome consist of hair-pin structures that may resemble telomeres of eukaryotic chromosomes. Enzymes and other proteins needed for DNA synthesis are encoded within the viral genome and replication occurs in the cytoplasmic compartment of infected cells. During the past year the DNA polymerase gene of vaccinia virus was completely sequenced and the primary structure of the enzyme was derived. A computer search of the National Biomedical Research Foundation protein data based revealed a significant homology with the DNA polymerases of Epstein-Barr virus and adenovirus. These data suggest that the DNA polymerases of poxviruses, herpesviruses and adenoviruses are related evolutionarily. Previous studies from this laboratory demonstrated the presence of concatemeric forms of vaccinia virus DNA in infected cells. The junction region, between individual genome units in these concatemers was stably cloned in an Escherichia coli plasmid. Restriction endonuclease analysis indicated that the junction consists of an imperfect palindrome. The nucleotide sequence of the complementary strands was identical to that of the flip-flop hairpin loops at the ends of mature genomes. In cells that were infected with vaccinia virus, plasmids containing 250 bp or more of the junction were replicated and converted into minichromosomes with vaccinia DNA hairpins at each end and plasmid DNA in the center. An enzyme that carries out similar or identical cleavage and ligation reactions has been isolated and is being characterized.